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I know that there is a rotation of bowl games that are used for the college football playoff. But once the three are selected for semis and final, how is it determined which of the semi final locations used for 1 vs 4 and 2 vs 3 respectively. A friend told me that number 1 seed gets to choose location but I can't find anything to back that up

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Not a specific rule or process that I found, but an old report says that the main factor is to prevent the higher seed from playing in an unfavorable environment and will be chosen by the committee.

From a 2013 USA Today piece by Dan Wolken (it is unclear to me what sources were used for the answers):

Q: How will geography factor in?

A: The selection committee's goal will be to protect the top two seeds from playing in road environments in semifinal games. For instance, if Southern Cal was the No. 1 seed and LSU was the No. 4 in 2014, that semifinal could be played in the Rose Bowl but not the Sugar Bowl.

Cronkite News has a piece from 2021 by Shawn DePaz with similar information, but makes explicit that the schools themselves do not have choice or input:

The goal for bowl selection is to give the higher ranked team the most advantageous location possible. This is more or less based on the location’s proximity to the school and the ability for the team’s fans to attend the game.

This led to an interesting situation where we had to decide to place LSU versus Oklahoma either in the Cotton Bowl at AT&T Stadium in Arlington, Texas or at the Orange Bowl in Miami, Fla.

This became a major point of contention for the mock committee because, in a vacuum, Arlington was a much better location for LSU than Miami. Some members noted Arlington’s proximity to Baton Rouge and the established LSU supporter base in the area.

On the other hand, Arlington is also very advantageous for Oklahoma, not only because of its proximity but because Oklahoma would have just played in the same stadium at the Big 12 Championship game.

Our committee ultimately decided to place the matchup in Miami in order to strip Oklahoma of the advantage they might receive in Arlington, but the discussion revealed what several of the mock committee members saw as a glaring error in the process.

Ultimately, this decision is being made by people who do not actually play in the game. It is very possible that, in this specific situation, LSU may have preferred to play in Arlington and paid no mind to the potential advantage Oklahoma may have had. The current process, however, gives members no way of knowing that.

It was suggested that the committee could seek input from the schools. Barta ultimately dismissed the idea, saying that it could lead to gamesmanship from the schools or the actual bowls attempting to unfairly incentivize schools to select them.

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I was able to find an "official" answer the College Football Playoff site. Under 'Pairings for Semifinals' they have called out

When assigning teams to sites, the committee will place the top two seeds at the most advantageous sites, weighing criteria such as convenience of travel for its fans, home‐crowd advantage or disadvantage and general familiarity with the host city and its stadium. Preference will go to the No. 1 seed.

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